10th May 2016 08:43
LONDON (Alliance News) - Merchant bank MXC Capital Ltd on Tuesday reported significant growth in its interim pretax profit, mainly due to unrealised fair value gains on its investment portfolio.
MXC said its pretax profit for the six months to the end of February quadrupled to GBP12.6 million, sharply higher than the GBP3.0 million posted a year earlier. This was driven by the fair value of its investments growing by GBP13.7 million over the course of the half, compared to GBP3.2 million growth a year before. The total value of MXC's investment portfolio was GBP73.0 million at the end of February, up 23% from the end of August 2015.
Revenue for the half also grew significantly, nearly tripling to GBP1.7 million from GBP600,000 as the group delivered good results from its investments, its corporate finance practice, and its advisory business.
MXC said it has decided to extend its distribution policy for shareholders and will now distribute all the net proceeds from realisations to shareholders, with the exception of sufficient capital retained to cover the requirements of its remaining portfolio at the time of the distribution.
"We have had a very good start to the year, demonstrating the strength of our merchant banking business model. Our Capital Markets and Advisory services are driving high returns on our increasing capital base," said Chairman Peter Rigg.
"In light of this performance, the board has decided to increase the quantum of distributions to shareholders, so that in future, we will return net proceeds of realisations after retaining sufficient investment capital in the business," he added.
MXC said its pipeline remains strong both in terms of new transactions and opportunities for its existing investments.
MXC shares were up 2.7% to 2.75 pence Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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